ADMINISTRATIVE REPORT

Date: November 19, 1997

CC File: 6008

TO: Standing Committee on City Services and Budgets

FROM: General Manager, Corporate Services

SUBJECT:Tourism Vancouver - Interim Payments of 2% Hotel Tax

RECOMMENDATION

THAT the Director of Finance be authorized to remit the first three months of the 2% Hotel Tax revenues for 1998, the amounts of each remittance not to exceed actual receipts from the Province of the 2% tax, in advance of Council's consideration of the Association's 1998 Business Plan.

COUNCIL POLICY

City Council has approved long-term agreements with Tourism Vancouver which obligate Tourism Vancouver to provide for the production of tourism promotional materials and the operation of an Info Centre at their cost, and confirm the City's intent to flow the 2% Hotel Tax to Tourism Vancouver. Under these agreements, City Council must receive the business plan of Tourism Vancouver, which details the allocation of the 2% Hotel Tax, and related tourism information annually. Council must formally authorize the release of the 2% Hotel Tax funds to Tourism Vancouver annually.

For the past six years, Council has authorized release of funds prior to approval of Tourism Vancouver’s Business Plan for the next tax year.

PURPOSE

This report seeks approval for early release of the first three months of the 1998 Hotel Tax proceeds, in accordance with prior years' policy.

INTERIM RELEASE OF FUNDS FOR 1998

In accordance with Council policy, Tourism Vancouver will be submitting its 1998 Business Plan for Council's review in the new year. Prior years' experience has shown that it will not be possible to prepare the 1998 Business Plan before March. In order to properly plan and launch the Tourism programs and projects planned for 1998, various up-front commitments are necessary, which must be funded in the latter part of the current year. Tourism Vancouver has, therefore, requested an advance on 1998 operations until its 1998 Business Plan has been approved by Council.

The General Manager, Corporate Services, believes an appropriate advance would be to forward the first three months of 2% Hotel Tax proceeds applicable to 1998 as and when received from the Province. This would be approximately $350,000 per month. Council has recognized this funding problem in the past, and has authorized the interim release of funds in prior years. Release of these funds does not represent pre-approval of the release of the full 1998 2% Hotel Tax revenues.

CONCLUSION

For a variety of legitimate reasons, Tourism Vancouver cannot produce a Business Plan earlier than March. Since the prior year's instalments of the 2% Hotel Tax end in November, there is up to a four month lag between the last instalment and approval of the next year's Business Plan. In the past, Council has recognized the problems created by this lag and has authorized interim releases of the next year's Hotel Tax receipts to bridge this gap.

The General Manager, Corporate Services recommends that the 2% Hotel Tax revenues applicable to the first three months of the 1998 business year again be released to Tourism Vancouver in order to accommodate their up-front commitments for the 1998 business year.

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(c) 1997 City of Vancouver